November 2022 St George housing market report
The housing train has slowed.
You read it here first, folks. I've been telling you this was coming, and here it is. Is this the end? Are we heading for (another) complete housing market crash?
No…I don't think it will replicate the crash of 2006. I do believe we will witness several similarities. We will push the boundaries of our comfort zone, much like those last few bites of Thanksgiving dinner.
This report will show what was. What is. And what (may) be in the St George and Hurricane housing market. Keep in mind that "what may be" is my opinion—I do not have access to determine the future, and my analysis should be taken as speculation (infused with insight and intuition).
What IS (and what WAS)
Check out this graph, specific to St George residential. The chart takes four years of comparison and offers the best insight into What Is. This graph isn't pretty.
The red line shows the "active" listings, and the black shows "sold." The large gap in between is "the ugly."
Last month, sales were lower than we've seen since February 2016. This month…worse! We sold even less for St George, Utah residential (closed October 2022). Months in inventory went from less than one month in March to 5 months in October. This is not good for a stable and healthy housing market. However, this does not mean we won't get back to stability and healthy market conditions—however, the landscape for how that will look will be different moving forward.
Sellers…I have to break it to you—if you're listed or thinking of listing—you've missed the "high." Gone (for now) are the days of unrealistic prices, and you will not achieve the prices your neighbor received three months ago. Interest rates have dramatically increased, and buyers who were already exhausted from the explosive housing market fight—are too tired to continue. Some opt to allow the dust to settle, and others have been removed simply because the rates have placed them into a price range that does not allow them to achieve their goals.
Investors tend to spook easily; they, too, will allow the dust to settle. This pause for the dust has compounded the lack of sales. The number of listings has increased---for a few reasons. This category is the most ordinary and stable thing about our current statistics. The number of active listings will continue to inch upward, but again, this number is quite average and healthy. Sales presumably will continue to decline, and as a result, prices will also decrease (I've been speculating about this for over a year). This decrease will feel terrible (primarily for sellers), but it will ultimately get us back to a healthy housing market. We have been inflated for so long; THAT was unhealthy. We are in a housing market boot camp revamp. We will trim the fat and ultimately become stronger and healthy.
Now….should you buy?
Yes! Interest rates will likely continue, and while prices will trend downward—if you find that home you love—you're better off getting it now. Here is the "why." Once we start to stabilize…investors will again be on the prowl. They know housing is more stable than stocks…so investors will be in full force once the dust settles. That means the average buyer will be beaten again, competing with investors. Right now, while the market is calm—this is your opportunity to get the home with far less competition. Sellers are willing to be more flexible, offering reductions or paying for rate buy down or closing costs. It's a buyers opportunity right now…that won't last. Seize this. Once the paradigm shifts and you notice sales increasing again...you'll already be too late. Again.
Sellers...you have a decision to make...stay or go.... Get those prices down now and get it sold. Or, put your family clutter back out on the shelves and stay. If you wait, you'll likely reduce even more...how much more? Well, now I have to save something for the next blog.
Have you seen my new listing? Check out this home in Washington, near Green Springs (near everything!) Larger home with ample parking. www.stgeorgeutrealestate.com/blog/257-n-prickly-pear-drive-washington-ut/
I am Paula Smith, Associate Broker with RealtyPath of St George. I have been a licensed, full-time real estate agent in Southern Utah since 2006. I have been selling residential real estate during all of the changes in the market and witnessing our St George area become one of the fastest-growing cities in America. I keep my finger on the pulse, paying attention to market conditions. If you're ready to buy or sell, I'm ready to make it happen.